Foreign Affairs, July/August, 1996. "The Rise of the Virtual State" [Excerpts] Richard Rosecrance, UCLA Professor of Political Science Amid the supposed clamor of contending cultures and civilizations, a new reality is emerging. The nation-state is becoming a tighter, more vigorous unit capable of sustaining the pressures of worldwide competition. Developed states are putting aside military, political, and territorial ambitions as they struggle not for cultural dominance but for a greater share of world output. Countries are not uniting as civilizations and girding for conflict with one another. Instead, they are downsizing -- in function if not in geographic form. Today and for the foreseeable future, the only international civilization worthy of the name is the governing economic culture of the world market. Timeworn methods of augmenting national power and wealth are no longer effective. Like the headquarters of a virtual corporation, the virtual state determines overall strategy and invests in its people rather than amassing expensive production capacity. It contracts out other functions to states that specialize in or need them. Imperial Great Britain may have been the model for the nineteenth century, but Hong Kong will be the model for the 21st. As a result of these trends, the world may increasingly become divided into "head" and "body" nations, or nations representing some combination of those two functions. The world is embarked on a progressive emancipation from land as a determinant of production and power. Diminishing their command of real estate and productive assets, nations are downsizing, in functional if not in geographic terms. Small nations have attained peak efficiency and competitiveness, and even large nations have begun to think small. If durable access to assets elsewhere can be assured, the need to physically possess them diminishes. The virtual state is an agile entity operating in twin jurisdictions: abroad and at home. It is as prepared to mine gains overseas as in the domestic economy. But in large countries, internationalization operates differentially. Political and economic decision-makers have begun to recast their horizons, but middle managers and workers lag behind. They expect too much and give and learn too little. That is why the dawn of the virtual state must also be the sunrise of international education and training. The virtual state cannot satisfy all its citizens. The possibility of commanding economic power in the sense of effective state control has greatly declined. Displaced workers and businesspeople must be willing to look abroad for opportunities. In the United States, they can do this only if American education prepares the way. ---------- http://pwp.usa.pipeline.com/~jya/vstate.txt (39 kb) VST_ate